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General Electric's (GE) Q3 Earnings Miss, Revenues Beat
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General Electric Company (GE - Free Report) reported third-quarter 2022 adjusted earnings (excluding 57 cents from non-recurring items) of 35 cents per share, which missed the Zacks Consensus Estimate of 47 cents. The bottom line declined significantly year over year.
Total revenues of $19,084 million surpassed the Zacks Consensus Estimate of $19,035 million. The top line increased in low-single digits year over year.
Segmental Discussion
Aerospace revenues jumped 24% year over year to $6,705 million in the reported quarter, driven by growth in commercial services due to a significant increase in shop visits, strong spare part sales and favorable prices. Organic revenues rose 25% year over year. Orders grew 6% year over year. Organic orders also increased by the same amount.
General Electric Company Price, Consensus and EPS Surprise
Healthcare revenues in the reported quarter totaled $4,613 million, up 6% year over year. Revenues increased 10% organically. Growth in imaging and ultrasound boosted segmental revenues. Orders were flat on a reported basis but increased 4% organically.
Renewable Energy revenues totaled $3,594 million, down 15% year over year. Organically, the same declined 10%. Results were hurt by lower U.S. onshore wind volumes. Orders dropped 43% year over year on a reported basis and 41% organically.
The Power segment’s revenues were down 12% year over year to $3,529 million. Organic revenues declined 5%. Softness in aero-derivative unit shipments at Gas Power and the exit of the new build coal business at Steam weighed on the segment’s performance. Orders climbed 14% on a reported basis and 20% organically.
Margin Profile
In the quarter under review, General Electric’s cost of sales (cost of equipment sold+ cost of services sold) ascended 7.2% year over year to $14,371 million. Selling, general and administrative expenses increased 4.5% year over year to $2,868 million. Research and development expenses totaled $686 million, reflecting an increase of 9.4%.
General Electric’s adjusted profit was $1,064 million, down 19% year over year. Margin in the quarter was 5.8%, down 160 basis points (bps). On a reported basis, the Aerospace segment reported profit of $1,284 million, up 52% year over year. Healthcare segment profit was $712 million, up 1% year over year. Renewable Energy segment incurred a loss of $934 million compared with a loss of $151 million in the year-ago quarter. Power segment reported a profit of $141 million, down 31% year over year.
Balance Sheet and Cash Flow
Exiting the third quarter, General Electric had cash, cash equivalents and restricted cash of $12,596 million compared with $15,770 million at the end of December 2021. The company’s long-term borrowings were $26,121 million at the end of the third quarter compared with $30,824 million at the end of December 2021.
Adjusted free cash flow in the reported quarter was $1,189 million, down 11.5% year over year. General Electric repurchased around 4.5 million shares for $300 million during the third quarter.
Outlook
General Electric expects organic revenues to grow in the low-end of high-single-digit growth range for 2022. The company estimates adjusted organic profit margin to expand 125-150 basis points in the year. Adjusted earnings are predicted in the band of $2.40-$2.80 per share. The mid-point of the guided range — $2.60 — falls short of the Zacks Consensus Estimate of $2.69. GE expects a free cash flow of approximately $4.5 billion for the ongoing year.
Zacks Rank & Key Picks
General Electric currently carries a Zacks Rank #3 (Hold).
Enerpac Tool has an estimated earnings growth rate of 44.6% for the current fiscal year. Shares of the company have gained 22.9% in the past six months.
iRobot (IRBT - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four quarter earnings surprise of 59.1%, on average.
iRobot has an estimated earnings growth rate of 36.6% for the current year. Shares of the company have rallied 13.8% in the past six months.
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General Electric's (GE) Q3 Earnings Miss, Revenues Beat
General Electric Company (GE - Free Report) reported third-quarter 2022 adjusted earnings (excluding 57 cents from non-recurring items) of 35 cents per share, which missed the Zacks Consensus Estimate of 47 cents. The bottom line declined significantly year over year.
Total revenues of $19,084 million surpassed the Zacks Consensus Estimate of $19,035 million. The top line increased in low-single digits year over year.
Segmental Discussion
Aerospace revenues jumped 24% year over year to $6,705 million in the reported quarter, driven by growth in commercial services due to a significant increase in shop visits, strong spare part sales and favorable prices. Organic revenues rose 25% year over year. Orders grew 6% year over year. Organic orders also increased by the same amount.
General Electric Company Price, Consensus and EPS Surprise
General Electric Company price-consensus-eps-surprise-chart | General Electric Company Quote
Healthcare revenues in the reported quarter totaled $4,613 million, up 6% year over year. Revenues increased 10% organically. Growth in imaging and ultrasound boosted segmental revenues. Orders were flat on a reported basis but increased 4% organically.
Renewable Energy revenues totaled $3,594 million, down 15% year over year. Organically, the same declined 10%. Results were hurt by lower U.S. onshore wind volumes. Orders dropped 43% year over year on a reported basis and 41% organically.
The Power segment’s revenues were down 12% year over year to $3,529 million. Organic revenues declined 5%. Softness in aero-derivative unit shipments at Gas Power and the exit of the new build coal business at Steam weighed on the segment’s performance. Orders climbed 14% on a reported basis and 20% organically.
Margin Profile
In the quarter under review, General Electric’s cost of sales (cost of equipment sold+ cost of services sold) ascended 7.2% year over year to $14,371 million. Selling, general and administrative expenses increased 4.5% year over year to $2,868 million. Research and development expenses totaled $686 million, reflecting an increase of 9.4%.
General Electric’s adjusted profit was $1,064 million, down 19% year over year. Margin in the quarter was 5.8%, down 160 basis points (bps). On a reported basis, the Aerospace segment reported profit of $1,284 million, up 52% year over year. Healthcare segment profit was $712 million, up 1% year over year. Renewable Energy segment incurred a loss of $934 million compared with a loss of $151 million in the year-ago quarter. Power segment reported a profit of $141 million, down 31% year over year.
Balance Sheet and Cash Flow
Exiting the third quarter, General Electric had cash, cash equivalents and restricted cash of $12,596 million compared with $15,770 million at the end of December 2021. The company’s long-term borrowings were $26,121 million at the end of the third quarter compared with $30,824 million at the end of December 2021.
Adjusted free cash flow in the reported quarter was $1,189 million, down 11.5% year over year.
General Electric repurchased around 4.5 million shares for $300 million during the third quarter.
Outlook
General Electric expects organic revenues to grow in the low-end of high-single-digit growth range for 2022. The company estimates adjusted organic profit margin to expand 125-150 basis points in the year. Adjusted earnings are predicted in the band of $2.40-$2.80 per share. The mid-point of the guided range — $2.60 — falls short of the Zacks Consensus Estimate of $2.69. GE expects a free cash flow of approximately $4.5 billion for the ongoing year.
Zacks Rank & Key Picks
General Electric currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies are discussed below:
Enerpac Tool Group (EPAC - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four quarter earnings surprise of 3.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Enerpac Tool has an estimated earnings growth rate of 44.6% for the current fiscal year. Shares of the company have gained 22.9% in the past six months.
iRobot (IRBT - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four quarter earnings surprise of 59.1%, on average.
iRobot has an estimated earnings growth rate of 36.6% for the current year. Shares of the company have rallied 13.8% in the past six months.